How the F&B Industry Can Recover and Grow Post-Lockdown
In 2022, customer experience relies heavily on technology. The pandemic ultimately kick-started a digital revolution in the food and beverage industry. Those brands that are using digital loyalty have more tools at their disposal to increase engagement, and crucially they have the data to truly understand their customer.
Loyalty apps can easily persuade customers to create digital profiles that link in-store and digital purchases across all channels. Brands are then able to collect behavioural data and get more intelligent about how, when, and what to reward their loyal customers with.
The result: customers are delighted with offers and rewards suited to their lifestyle, and brands that create personalized experiences make consumers 72% more likely to repeat purchases compared to brands that don’t bother with customizing rewards.
We’ve outlined the different loyalty programs that are currently available across popular food chains in this sector so you can understand how technology can help you grow your business post-lockdown…
LOYALTY TECHNOLOGY IS ON THE MENU FOR RESTAURANTS TO RECOVER AND GROW POST-LOCKDOWN
The pandemic reduced footfall in restaurants and fast-food joints across the nation. Businesses were forced to implement QR codes for virtual menus, ordering, and contactless payments. This shift came with its challenges – establishments could no longer use in-person hospitality to up-sell or cross-sell, and customer experience now relies a great deal on technology. Fortunately, for the brands that implemented loyalty technology into their digital apps, mobile dining has created many opportunities to regain the customers they lost during the pandemic.
THE FOOD AND BEVERAGE INDUSTRY FACES THE BIGGEST IMPACT OF COVID RESTRICTIONS
The UK lost almost 1,000 pubs and restaurants as a result of lockdowns. Even after the restrictions were lifted, the industry has struggled to recover: Karl Chessell from CGA Strategy warned the industry faces a long road to recovery: “restrictions on socialising and trading may have eased, but their impacts continue to be felt by restaurants, pubs, and bars whose reserves have been eaten up by months of closure”.
Not only is this industry battling a sense of collective anxiety around going out and eating in public settings, but its customer base is often inconsistent. After all, who wants to eat at the same place every week? These issues make improving customer loyalty and engagement difficult. We are seeing, however, that food and beverage brands who have committed to launching loyalty programs (even in the storm of the pandemic) are seeing their investments pay off…
HOW LOYALTY PROGRAMS ARE HELPING RESTAURANTS THRIVE IN THE NEW NORMAL
83% of consumers choose where to eat within 3 hours of a meal, with over half of them making an impulsive, last-minute decision. The majority of these diners rely on their mobile phones to help choose a location. This gives brands the unique opportunity to target customers through text notifications, in-app notifications, or marketing campaigns that hit consumers at the exact moment they’re choosing where to eat.
Once the restaurant has brought customers in, they need to figure out how to keep them coming back for seconds. This is where the brand-consumer connection is imperative. This connection can take many forms, but the most effective ones are those which initiate a closed-loop, personalized reward exchange.
Take this example: a restaurant provides single-use offers based on data they have about a customer (think: what they repeatedly order, where, and when). A customer redeems an offer and the restaurant is sent more data about this customer’s activity. This gets looped back into the loyalty technology to create even more relevant and personalized offers in the future. The result: the customer is delighted with offers and rewards suited to their preferences and lifestyle. What’s more, brands that create personalized experiences make consumers 72% more likely to repeat purchases compared to brands that don’t bother with customizing rewards.
A survey by Publicis Sapient’s Digital Life Index found that ⅓ of respondents feel a customer loyalty program is one of the top 3 factors that they consider when choosing what to eat. Such results are reflected in how many food brands have invested in loyalty solutions over the past few years.
Let’s take a look at some of the loyalty programs on offer today to see how they work to improve customer acquisition, retention, and loyalty…
THE FOOD CHAINS COOKING UP INTELLIGENT LOYALTY PROGRAMS
1. GREGGS REWARDS
Greggs introduced their new and improved mobile loyalty scheme “Greggs Rewards” back in 2020. The scheme offers customers digital stamps and rewards across all baked goods. Customers are rewarded for transactions but also have access to extra offers such as a free “birthday treat” and a “free Bake and a hot drink of your choice just for downloading the app”.
That’s a win-win for brand and consumer – Greggs receives early information about what each customer likes, and Greggs fans get rewarded with the products they enjoy most frequently. The brand also uses its mobile app as a marketing tool to push its Click & Collect function, location finder, and showcase new product launches. Greggs has credited its refreshed rewards app for their post-pandemic sales growth, with plans to further invest in customer loyalty currently baking in the oven…
2. NANDO’S REWARDS
Back in 2018, Nando’s knew that transitioning to a digital-first loyalty scheme would improve customer experience across their restaurants. The original Nando’s loyalty program relied on plastic cards that needed to be handed to staff with each transaction. Customers would collect “chilli’s” that could then be redeemed for free meals.
As we know with traditional loyalty programs, there are multiple issues with relying on a plastic card: customers have to keep them and remember them for each visit. Furthermore, the use of plastic didn’t translate to the environmentally-friendly and modern values that Nando’s wants to be known for. Fast-forward to the launch of their digital Nando’s Rewards program – the chain saw over 300,000 customers signed up to the mobile app within just 3 months. The switch to digital eliminated the pain points of lost or forgotten cards and created a future-proof loyalty scheme that has since proven to boost customer engagement.
3. COSTA COFFEE CLUB
The nation’s favourite coffee shop relaunched it’s Costa Club Rewards Scheme in 2021, which rewards customers with “beans” that can be exchanged for their favourite drink. As with Greggs, Costa Club members get a free cake on their birthday and the occasional surprise of “exclusive money-off rewards and bonus beans”. Although Costa Coffee still accepts physical loyalty cards, the switch to a digital app complements the brand’s incentives to reward “green” customers with ‘beans’ each time they bring a reusable cup into stores.
4. CHIPOTLE REWARDS
Over in the States, popular Mexican restaurant chain Chipotle operates a rewards program with over 24 million members. The program helped the chain drive more than $2 billion in digital sales in 2021 alone. Such success caused the brand to expand its rewards beyond food, to “include branded apparel and the opportunity to support the chain’s nonprofit partners”. This could prove a tactical move for Chipotle to differentiate itself from competitors’ food-focused rewards, and even establish itself as a lifestyle brand.
Amazingly, Chipotle managed to nearly double its rewards members during the pandemic. The chain has said that about 80% of its digital business is growing despite the effects of lockdowns. More recently, Chipotle has integrated gamification elements into their loyalty program, launching a video game called “Race to Rewards Exchange”. The game is only available to Chipotle Rewards members, with players able to earn 10 points per second they ‘drive’. The top scorer could win a Tesla car, and up to 500,000 players each day will receive 250 points in their rewards account (that’s enough for a side of fries).
Fast-food chain Taco Bell kicked off 2022 with the launch of a taco subscription service. The “Taco Lover’s Pass” is available on the brand’s app, which allows customers to redeem 1 of 7 iconic tacos a day for 30 days for just $10.
Chief Digital Officer at Taco Bell noted that the loyalty program highlights their “commitment to digital innovation and value”, and provides a “unique way to reward [their] most loyal fans through digital access points”. The launch of the Taco Lover’s Pass went nationwide across the US after a successful trial which saw many customers sign up: 20% of which were completely new to the Taco Bell Rewards Program, with a further 20% being repeat customers who signed up a second time.
Taco Bell’s app is committed to giving Mexican-food-lovers a great customer experience by offering a multitude of rewards; in 2021, members could receive exclusive access to menu items, early access to new food launches, Cyber Monday deals, and more. The app is also able to link in-store and digital purchases across multiple channels: customers simply download the app and receive points when they order online, via the app, in a restaurant, or by scanning their receipts.
LOYALTY TECH TO BECOME THE BREAD AND BUTTER OF THE F&B INDUSTRY IN 2022
The above brands are all able to use their loyalty programs to increase customer engagement using a win-win digital-first approach. Health-conscious consumers are happy to use mobile apps to place orders and reduce contact, and brands can make the most of the global switch to digital ordering by showcasing their loyalty programs.
Loyalty apps can also easily persuade customers to create digital profiles that link in-store and digital purchases across all channels. Brands are then able to collect behavioural data and get more intelligent about how, when, and what to reward their loyal customers with.
One of the core benefits of a restaurant loyalty program is the ability to create campaigns that are triggered by customer data. Loyalty programs can collect historical, locational and behavioural information about each diner which can be used to set up promotions, notifications, or marketing campaigns.
Delivering targeted offers at these crucial times of impact is the key to increasing customer engagement in this industry. Those brands that incorporate AI and machine learning to create marketing triggers based on data are winning the race to recover their missed sales and revenue post-pandemic.
Such data isn’t just useful for personal customer interactions. Restaurants are also using loyalty data to make key strategic business decisions – such as where to open a new establishment.
THE RISE OF TECHNOLOGY ACROSS HOSPITALITY
Digital loyalty is part of a rising trend of technology-driven solutions in the hospitality sector; more and more businesses are adopting technology that can improve the customer experience in restaurants, bars, and cafes. One such company is ChargedUp, which offers a network of portable phone-charging stations. This is a unique marketing tool for venues, with the idea being that the longer customers stay in a venue to charge their phone, the more money they’ll spend. It also eradicates the main issue with mobile dining: dead phone batteries.
The company has already partnered with over 2500 venues across Europe. Last year, in response to pubs and restaurants reopening, the ChargedUp entrepreneurs also unveiled another technology offering called ServedUp. Tom Blomfield, co-founder of Monzo Bank and investor in the hospitality ‘super app’ said “with the new all-encompassing app, you’ll be able to discover the best spots; book them; order and pay; earn rewards from some of the world’s biggest beverage brands, all while keeping your phone fully charged while you do it”.
Technology in hospitality is providing customers with a frictionless way of ordering, paying and collecting rewards when they go out. Blomfield added: “Bars and restaurants were hit really hard in the pandemic, and some sadly closed. It’s wonderful to see them now reopening, and our cities coming back to life. I’m delighted to be a backer of ChargedUp, a company that’s playing an integral part in that recovery by making it incredibly quick and simple for customers to order and pay”.
WHICH TABLES WILL BE FULLY-BOOKED IN THE POST-PANDEMIC ECONOMY?
For those who still haven’t made the digital leap, time may be running out. Consumer expectations change quickly, and brands that are using digital loyalty have more tools at their disposal to increase customer engagement and recover business. The pandemic has ultimately kick-started a digital revolution in the food and beverage industry, and data-powered loyalty marketing is just the beginning…
User experience will also be a huge factor in this market. Brands must make sure their digital apps are user-friendly so they do not alienate older demographics who may be less tech-literate.
Whilst the pandemic brought with it a list of unknowns, one shift will continue to remain post-lockdown: customers are going to need their smartphones when dining out!
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Senior Content Marketing Executive
Helen is our Senior Content Marketing Executive. She shares valuable information about the Future of Loyalty and will keep you up to date on the latest industry insights...